Prices Rise Over Gold on Supply, Demand Concerns
Platinum prices finally have risen above gold prices. During this time when the demand for the white metal is increasing, the concerns of the mine supply is falling. Anglo American Platinum (primary producer of platinum) is closing four mines in South Africa. “Mothballing the shafts will cut platinum production by 400,000 ounces annually, to about 2.1 million to 2.3 million ounces. The market was bracing for about 250,000 ounces in production losses, so the 400,000 was more than most market watchers were expecting.” News, Kitco. "FOCUS: Platinum Prices Rise Over Gold On Supply, Demand Concerns." Forbes. 15 Jan. 2013. Forbes Magazine. 24 Jan. 2013 The impact of this economic situation will cause the unemployment rate to rise. The closings of the mines will affect up to $14,000 jobs, which is 24% of its workforce. News, Kitco. "FOCUS: Platinum Prices Rise Over Gold On Supply, Demand Concerns." Forbes. 15 Jan. 2013. Forbes Magazine. 24 Jan. 2013. Since the platinum was much cheaper than gold, the demand increased causing gold’s demand to decrease. Since there will be a shortage supply of platinum, the gold jewelry will see an increase in demand and need to increase their supply. Households are more likely to buy the cheaper product. With platinum’s greatest use being in auto catalysts (catalytic converter), this will increase the cost of that part and maybe increase the cost of a vehicle. There are many economic concepts discussed that we have covered in the text. The article focuses greatly on chapter 3 (Demand, Supply, and Market Equilibrium). Determinants of household demand being prices of other goods and services saying the price of one good affects the demand for other goods. There will be a movement along the demand curve from the price and quantity demanded changing. There will also be a movement along the supply curve as the change in quantity supplied is brought on by the change in price. Chapter 7 which...
Please join StudyMode to read the full document